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  • Commission Pay Massachusetts

    I am in a sales position for a company that does special events. We are paid on salary, and also receive commission based on percentages of things like food cost, items we rent out, and additional services we provide.
    Last week the sales department was informed that commission policies were being changed with regards to how commissions are calculated for rental items and additional services that we book. We were then told that they would be applied to our May sales (retroactively, as commission is paid a month after the fact). This has resulted in the entire department not receiving any commission for the month (a very significant amount of $ that the company will be able to hold on to). The new policies contradict everything I and other sales people have been trained to do with regards to how a client is charged (and thus the amount of commission we would make on certain items), and reveiwing what has been presented to me, I've noticed some serious "creative accounting" on their end with regards to how my commission was calculated using the new system.

    Because the fiscal month of June was already 3/4 ended when they made this announcement, I have no opportunity to conform to the new policies for the events that have already taken place earlier in that month either. (I cannot adjust an invoice to a client that has already paid their final balance, etc.). So, I'm out another month of commissions.

    Is it legal for my employer to do this, without giving us notice of a change in policy about how commissions will be calculated, and not giving us the opportunity to conform to the new policy?

  • #2
    The retroactive change is likely improper. Someone would have to look at the policy to determine whether or not there are any loopholes.

    Then, you'd have to figure out whether you have a contract claim or a wage claim for the earned month. In any case, it's probably not a bad idea to call the Attorney General (Wage & Hour Division) and ask. 617-727-3465.

    As to whether or not a forward change is acceptable, that again would turn on the terms of the Incentive Plan and the amendment provisions. It might also turn on other parts of your relationship - more specifically, whether you are an employee at will or an independent contractor.
    This post is by Philip Gordon, a Massachusetts employment attorney (www.gordonllp.com).

    This post is NOT legal advice. It is for general/educational information purposes only. You should not rely on this post if you are making decisions, and it does not create an attorney-client relationship. This post may be considered "advertising" under the MA professional rules for attorneys.

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